How COVID affects your cover
2020 has been a year like no other, forcing us to adapt our lifestyles and behaviours in ways we never thought possible. Having traded boardrooms for virtual meetings and holidays for staycations, our lives look a little different than they did 12 months ago.
11 Nov 2020 08:47
Given the sweeping lifestyle adjustments and financial uncertainty that only a global pandemic can bring about, insurance has become more critical than ever. Yet in an unprecedented year, many claimants remain uncertain as to how the ever-changing global outlook affects their cover and what steps they might need to take to ensure they are adequately insured.
Here are a few of the questions most commonly posed to insurers since COVID-19 made landfall in South Africa in March 2020, as well as the answers you need to know before filing your next claim:
Am I still obliged to pay for cover during lockdown?
Given the nationwide lockdown and restrictions experienced during the early part of the year, many claimants were either unable or unwilling to pay their monthly premiums. While many insurers have been lenient, given the unprecedented financial uncertainty of the period, the bottom line is that insurers cannot provide cover when premiums are unpaid. As such, should you submit a claim and still have payments outstanding, it is unfortunately likely to be rejected if it falls outside the period of grace.
Can I change my policy based on lifestyle changes?
For most South Africans, life has changed significantly over the past few months. On average, we are spending less time on the roads and more time at home, thus exposing ourselves to a lesser degree of risk. And whilst risk will always be a factor - for example, staying at home won’t rule out the possibility of your car being stolen from your driveway or street parking - you might well be eligible for a revised premium, given your lower risk threshold. As such, you’d be well advised to speak to your insurer and discuss possible revisions to your insurance contract.
Can I request a cash settlement?
Due to financial constraints experienced as a result of the pandemic, many clients have requested cash settlements as they are unable to cover their excess. Whilst this is indeed possible, it can result in delays in repairing or replacing the insured item, and you’re likely to lose out on the preferential rates pre-negotiated by your insurer with third-party service providers.
While the onset of COVID has certainly resulted in many unique and unprecedented queries, a number of other commonly asked questions remain unchanged. Here are a few of the most frequently addressed doubts:
Do I have to pay excess if the accident was not my fault?
COVID or no COVID, accidents happen, and in some instances, claimants are not at fault. But what happens if the guilty party is unable to afford the excess or is uninsured? Cases of this nature present numerous complications, but most insurers provide clients with legal assistance, and will work to recover the excess on your behalf. This can be a lengthy process, and success is not always guaranteed, but you certainly have a right to appeal should you find yourself involved in an accident that you did not cause.
Over the limit? Can I still claim?
If you’ve been involved in an accident and found to have been over the limit at the time - be it the speed or the legal alcohol limit – this may have a negative impact on your claim. Any breach of the law is considered reckless behaviour and thus does not fall within the scope of your cover. As such, particularly in light of the upcoming festive season, stick to the rules to ensure that any potential claims are honoured by your insurer.
Remember that any insurance contract is an agreement between two parties, based on good faith and full disclosure. It’s important to notify your insurer should you undergo any significant lifestyle changes, thus ensuring that your cover is still 100% valid and applicable to your current situation.
MiWay is a licensed non-life insurer and Financial Services Provider (FSP 33970).
About the author
Karabo Kopeka is MiWay Insurance's Head of Claims.